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Second phase drilling by Canada's Sulliden Exploration (TSX: SUE) at its Shahuindo gold-silver project in northern Peru has confirmed the presence of a large-scale gold system, company president Jacques Trottier told analysts in a conference call.
Of the 54 holes for 8,500m, over 50% intersected economical mineralization, said Trottier in a presentation of the second phase results.
In addition, drilling confirmed that the different mineralized zones identified at Shahuindo were all part of the same continuous system, with a strike length of 6km, he said.
Including two new zones, Paquilla 2km to the north and Cerro Rodondo 1.5km to the south, mineralization extends over an area 8 x 4km and vertically to a depth of at least 400m.
"We are looking at a major gold system, a giant system that places us in the same category as our neighboring world-class deposits Yanacocha and Alto Chicama," concluded Trottier.
A new resource calculation underway due end-March is expected substantially to increase the current resource of 1.14Moz of gold and 26Moz of silver released in March 2004, according to the company.
A scoping study is nearing completion, with a feasibility study planned to get underway this year at Shahuindo in northern Peru's Cajamarca department.
Sulliden's acquisition of Shahuindo from Peruvian miner Algamarca in November 2002 for US$4.13mn has been legally challenged by Lima-based Atimmsa, which claims the deal was never completed. Atimmsa took control of Algamarca in January 2003.
Trottier mentioned recent important legal decisions made in Sulliden's favor and said the company was confident of a positive outcome of both legal and arbitration processes tackling the issue.
Elsewhere in Peru, Sulliden plans shortly to start exploring the Torrine gold property under a JV with Peruvian gold miner Aruntani. The property is in the same district as the latter's operations in southern Peru's Puno department.
Sulliden also plans to start exploration at the Vikingo gold-silver property near Shahuindo in Cajamarca department.